Xstrata Nickel Australasia has this week informed its employees and relevant stakeholders of its plans to defer the development of the underground mine at the Sinclair operation due to current market conditions. The underground mine had been expected to commence development this month to enable a seamless transition to underground mining in August 2009, when the current open pit mine is planned to cease operations.
The open pit mine will continue to operate as planned until August. Development of the underground operation will be deferred pending an improvement in market conditions and we expect to put the Sinclair operation onto a care and maintenance schedule from August. Production from Xstrata Nickel Australasia’s larger, higher grade Cosmos operation will continue as planned, with expected production of 13,000 tonnes of nickel in concentrate in 2009.
Approximately 160 employees including contractors are employed at Sinclair. There will be no immediate redundancies at Sinclair, however positions will be made redundant between now and the conclusion of the open pit as operations are downsized and placed on care and maintenance. Alternative positions within Xstrata Nickel Australasia and other Xstrata operations will be offered to affected employees to the greatest extent possible and an enhanced employee assistance programme will be implemented.